HOW INFRASTRUCTURE INVESTMENTS AFFECT ECONOMIC ACTIVITY?

This article presented an econometric evaluation, based on time series models, to analyze the long-term relationship between the gross capital formation index with emphasis on civil construction, considering that this index was developed and published by IPEA and the index of economic activity of the Central Bank as a proxy for GDP growth. Although simple, the exercise may yield important evidence that might feed into the literature from an anecdotal evidence perspective. The results show that a 1% variation in the fixed capital formation index induces a variation of approximately 0.4% in the GDP, in the long term, configuring an inelastic relationship between investments in infrastructure based on civil construction and the GDP.